A Decision Problem of Hotels on Setting Online-Exclusive-Rooms in E-Commerce Age

Read  full  paper  at:

http://www.scirp.org/journal/PaperInformation.aspx?PaperID=49165#.VJJNEcnQrzE

Author(s)

Liang Xu, Xiaoyan Xu

Affiliation(s)

University of Science and Technology of China, Hefei, China.
University of Science and Technology of China, Hefei, China.

ABSTRACT

Due to the rapid development of information technology, customers’ consumption pattern in hotel industry has dramatically changed, and many people book rooms through some professional online platforms. Hotel managers need to redesign their sale channel structures by incorporating online platforms, in order to increase profit. This paper focuses on a revenue maximization problem for a hotel which cooperates with an online platform. Two cooperating forms are investigated and compared. Specifically, one intuitive form is named complete sharing, in which all the hotel rooms are shared with the online platform for booking. The other form is named setting online-exclusive-rooms (OERs), in which the hotel set a fixed quantity of rooms for exclusively booking from the online platform. By building a loss queueing model, this paper finds some properties of the optimal quantity of OERs in the latter form. Factors affecting the selection and how they affect the selection are also investigated.

KEYWORDS

Revenue Management, Hotel Room Management, Online Platform, Optimization

Cite this paper

Xu, L. and Xu, X. (2014) A Decision Problem of Hotels on Setting Online-Exclusive-Rooms in E-Commerce Age. Journal of Service Science and Management, 7, 323-336. doi: 10.4236/jssm.2014.74029.

References

[1] Dellarocas, C. (2003) The Digitization of Word-of-Mouth: Promise and Challenges of Online Feedback Mechanisms. Management Science, 49, 1407-1424.
http://dx.doi.org/10.1287/mnsc.49.10.1407.17308
[2] China Tourism Academy (2011) Report of the Development of China’s Tourism E-Commerce.
http://www.ctaweb.org/html/2011-9/2011-9-14-17-14-34961.html
[3] Morgan, N.P. and Piggott, A.R. (2003) Destination Branding and the Role of the Stakeholders: The Case of New Zealand. Journal of Vacation Marketing, 9, 285-299.
http://dx.doi.org/10.1177/135676670300900307
[4] O’Connor, P. and Frew, J.A. (2004) An Evaluation Methodology for Hotel Electronic Channels of Distribution. International Journal of Hospitality Management, 23, 179-199.
http://dx.doi.org/10.1016/j.ijhm.2003.10.002
[5] Rothstein, M. (1974) Hotel Overbooking as a Markovian Sequential Decision Process. Decision Science, 5, 289-404.
http://dx.doi.org/10.1111/j.1540-5915.1974.tb00624.x
[6] Liberman, V. and Yechialli, U. (1978) On the Hotel Overbooking Problem: An Inventory System with Stochastic Cancellations. Management Science, 24, 1117-1126.
http://dx.doi.org/10.1287/mnsc.24.11.1117
[7] Sieburgh, J.A. (1988) Yield Management at Work at Royal Sonesta. Lodging Hospitality, 9, 235-237.
[8] Badinelli, R.D. (2000) An Optimal, Dynamic Policy for Hotel Yield Management. European Journal of Operational Research, 121, 476-503.
http://dx.doi.org/10.1016/S0377-2217(99)00046-6
[9] Bitran, G. and Mondschein, S.V. (1995) An Application of Yield Management to the Hotel Industry Considering Multiple Stays. Operation Research, 43, 427-443.
http://dx.doi.org/10.1287/opre.43.3.427
[10] Bitran, G. and Gilbert, S.M. (1996) Managing Hotel Reservations with Uncertain Arrivals. Operation Research, 44, 35-49.
http://dx.doi.org/10.1287/opre.44.1.35
[11] Baker, R.D. and Collier, D.A. (2003) The Benefits of Optimizing Prices to Manage Demand in Hotel Revenue Management Systems. Production and Operations Management, 12, 502-518.
http://dx.doi.org/10.1111/j.1937-5956.2003.tb00217.x
[12] Chiang, W.K., Chhajed, D. and Hess, J. (2003) Direct Marketing, Indirect Profits: A Strategic Analysis of Dual-Channel Supply-Chain Design. Management Science, 49, 1-20.
http://dx.doi.org/10.1287/mnsc.49.1.1.12749
[13] Tsay, A. and Agrawal, N. (2004) Channel Conflict and Coordination in the E-Commerce Age. Production and Operations Management, 13, 93-110.
http://dx.doi.org/10.1111/j.1937-5956.2004.tb00147.x
[14] Viswanathan, S. (2005) Competing across Technology-Differentiated Channels: The Impact of Network Externalities and Switching Costs. Management Science, 51, 483-496.
http://dx.doi.org/10.1287/mnsc.1040.0338
[15] Dumrongsiri, A., Fan, M., Jain, A. and Moinzadeh, K. (2008) A Supply Chain Model with Direct and Retail Channels. European Journal of Operational Research, 187, 691-718.
http://dx.doi.org/10.1016/j.ejor.2006.05.044
[16] Miller, B.L. (1969) A Queuing Reward System with Several Customer Classes. Management Science, 16, 234-245.
http://dx.doi.org/10.1287/mnsc.16.3.234
[17] Printezis, A., Burnetas, A. and Mohan, G. (2009) Pricing and Capacity Allocation under Asymmetric Information Using Paris Metro Pricing. International Journal of Operational Research, 5, 265-279.
http://dx.doi.org/10.1504/IJOR.2009.025196
[18] Kimura, T. (2000) Equivalence Relations in the Approximations for the M/G/s/s+r Queue. Mathematical and Computer Modeling, 31, 215-224.
http://dx.doi.org/10.1016/S0895-7177(00)00090-X
[19] Medhi, J. (2003) Stochastic Models in Queueing Theory. Academic Press, Boston.
[20] Hassin, R. and Haviv, M. (2003) To Queue or Not to Queue: Equilibrium Behavior in Queuing Systems. Kluwer Academic Publishers, Boston.
http://dx.doi.org/10.1007/978-1-4615-0359-0
[21] Kleinrock, L. (1975) Queueing Systems. Vol. I, Wiley, New York.
[22] Fox, B. (1966) Discrete Optimization via Marginal Analysis. Management Science, 13, 210-216.
http://dx.doi.org/10.1287/mnsc.13.3.210
[23] Harel, A. (1990) Convexity Properties of the Erlang Loss Formula. Operations Research, 38, 499-505.
http://dx.doi.org/10.1287/opre.38.3.499
[24] Rabi, N.B. and Edward, C.W. (2009) Stochastic Processes with Applications. Society for Industrial and Applied Mathematics, Philadelphia.
[25] Messerli, E.J. (1972) Proof of a Convexity Property of the Erlang B Formula. The Bell System Technical Journal, 51, 951-953.
http://dx.doi.org/10.1002/j.1538-7305.1972.tb01956.x
[26] Boyd, S. and Vandenberghe, L. (2004) Convex Optimization. Cambridge University Press, Cambridge.
http://dx.doi.org/10.1017/CBO9780511804441                                                                      eww141218lx
Advertisements

发表评论

Fill in your details below or click an icon to log in:

WordPress.com 徽标

You are commenting using your WordPress.com account. Log Out /  更改 )

Google+ photo

You are commenting using your Google+ account. Log Out /  更改 )

Twitter picture

You are commenting using your Twitter account. Log Out /  更改 )

Facebook photo

You are commenting using your Facebook account. Log Out /  更改 )

Connecting to %s